Shaken by the realities of the Great Recession, American workers have adjusted their visions of retirement, according to the 13th Annual Transamerica Retirement Survey released in May 2012 by the nonprofit Transamerica Center for Retirement Studies. And most said they would switch jobs for a better retirement plan.
The survey of more than 3,600 American workers at for‐profit companies with 10 or more employees was conducted in January 2012 and funded in part by the Transamerica Life Insurance Co. It found that an overwhelming 90 percent of respondents cited an employee self‐funded plan as important, and more than half (53 percent) would be likely to leave their current employer for a nearly identical job with a similar employer for better retirement benefits.
In addition, majorities of American workers:
- Plan to work past age 65 (56 percent of respondents).
- Plan to continue working after they retire (54 percent).
These expectations were prevalent among workers of all age ranges, not just older workers. But despite workers’ demonstrated commitment to saving, just 39 percent say they believe that they are building a sufficient nest egg, underscoring the need to redefine “retirement readiness” in a way that is better suited to these new realities, according to the survey report.
“American workers are adjusting their expectations of retirement, including working past age 65 and planning to work part time in retirement,” said Catherine Collinson, president of the Transamerica Center. “American workers have reshaped their vision of retirement; now it’s time to provide an updated roadmap to help them achieve retirement income to last throughout their lifetime.”
Employees Seek Guidance
Among other findings, the survey revealed that:
- Many workers (44 percent) expect to rely on savings from 401(k) or similar retirement plans as their primary source of income when they retire.
- A majority of workers (62 percent) desire information and guidance about retirement planning from their company. When asked what could motivate them to learn more about saving for retirement, most respondents (52 percent) cited a good starting point or educational materials that are “easier to understand.”
A Checklist for Retirement Readiness
The Transamerica Center proposes the following definition of retirement readiness: A state in which individuals are well prepared for retirement, should it happen as planned or unexpectedly, and can continue generating adequate income to cover living expenses throughout their lifetimes through retirement savings and investments, employer pension benefits, government benefits or continuing to work in some manner while allowing for leisure time to enjoy life."
The center identified five building blocks for retirement readiness:
- A clear vision of retirement, including retirement dreams, expected retirement age and any plans to continue working in retirement.
- Retirement income, including savings and investments, pension benefits and government benefits.
- A retirement strategy that incorporates savings needs, potential risks and a backup plan if forced into retirement sooner than expected.
- Knowledge to make informed decisions about retirement investments, government benefits and health care.
- A family understanding and an open dialogue about finances and any expectations of support.
Stephen Miller, CEBS, is an online editor/manager for SHRM. To read the original article, please click here.